Feb. 8 (Bloomberg) -- China’s trade expanded more than
estimated and a broad measure of credit rose to a record in a
January that had five more working days than last year, helping
sustain a rebound in the world’s second-biggest economy.

China’s trade and credit data may indicate a strengthening
economy, even as indicators in the first two months are
distorted by the weeklong Lunar New Year holiday that was in
January in 2012 and starts tomorrow for 2013. The new leadership,
headed by Xi Jinping, is seeking to sustain a recovery without
fueling inflation or spurring excessive financial risks from
shadow banking and local-government debt.

“China’s growth recovery remains on track and inflation
pressures remain manageable,” said Chang Jian, a Hong Kong-based economist at Barclays Plc who formerly worked for the
World Bank. That is likely to add to “recent positive
market sentiment,” she said.

M2 money supply rose 15.9 percent in January from a year
earlier, the People’s Bank of China said today, exceeding the 14
percent median estimate in a Bloomberg survey of economists.

Trade Surplus

Export growth compared with the 17.5 percent median
estimate in a Bloomberg News survey. Import gains exceeded the
23.5 percent median forecast. The trade surplus of $29.15
billion was above the $24.7 billion median projection and
compares with a $27.1 billion excess a year ago.

“This strong export number cannot be fully explained by
the Chinese New Year effect alone,” Zhang Zhiwei, chief China
economist at Nomura Holdings Inc. in Hong Kong, said in a note.
“These data suggest that external and domestic demand are both
strong, which supports our view that the economy is on track for
a cyclical recovery” in the first half.

Adjusted for the number of working days, exports rose 12.4
percent in January from a year earlier while imports increased
3.4 percent, the customs administration said. The agency said
last month that exports increased 14.1 percent in December and
imports gained 6 percent.

Consumer-price gains slowed from a year earlier, in line
with analyst forecasts, after a 2.5 percent pace in December,
statistics bureau data showed today. The agency said the
deceleration resulted in part from the timing of the holiday.
Factory-gate prices declined 1.6 percent, the 11th straight drop.

Export Index

The customs administration today introduced an export
managers’ index based on data from an online survey. The gauge
was 37.5 in January, 3.3 points higher than in December and the
second increase in a row, according to a statement which did not
provide details about methodology. The rise in the gauge
indicates a “relatively optimistic” outlook for foreign trade
in the first quarter, the agency said.

Economic expansion is likely to pick up to 8.1 percent this
quarter from 7.9 percent in the previous three months, according
to a Bloomberg survey of analysts in January. The central bank
said in its fourth-quarter monetary-policy report released Feb.
6 that growth momentum is “relatively strong” while
highlighting concern that inflation risks will increase.

Chinese authorities have shown intention to prevent
overheating and overinvestment, and the central bank’s next
interest-rate move is likely to be an increase, Lu Ting, head of
Greater China economics at Bank of America Corp. in Hong Kong,
said in an interview with Bloomberg Television today.

‘Impressive’ Data

At the same time, there will be “very impressive macro
data for the first quarter,” Lu said.

Separately, Japan posted back-to-back monthly current-account deficits for the first time since 1981, highlighting
challenges for Prime Minister Shinzo Abe’s campaign to revive
the economy. The shortfall in the widest measure of the nation’s
trade was 264.1 billion yen ($2.8 billion) in December, the
Ministry of Finance said in Tokyo today.

Elsewhere, the Reserve Bank of Australia cut its estimate
for the nation’s economic growth this year, estimating a “below
trend” pace of about 2.5 percent, compared with around 2.75
percent forecast in November. Consumer prices will rise 3
percent in the year through June 2013, compared with the 3.25
percent increase forecast three months earlier, the central bank
said.

Germany Record

German exports rose in December, capping a record year even
as the sovereign debt crisis weighed on euro-area demand. The
U.S. will report its trade deficit narrowed to $46 billion in
December from $48.7 billion the prior month, according to the
median forecast of economists.

In China, a government-backed survey of purchasing managers
released Feb. 1 showed manufacturing expanded for a fourth month
in January and a separate gauge from HSBC Holdings Plc and
Markit Economics rose to the highest level in two years, signs
the growth recovery may be gaining strength.

Industrial production, retail sales and fixed-asset
investment numbers for January will be combined with February
data and published in March.

“A better reading of the coincident activity indicators
will need to wait till March, with both January and February
data becoming available,” Chang of Barclays said.

The median estimate in a Bloomberg survey for local-currency loans was 1 trillion yuan, compared with 738.1 billion
yuan in January 2012 and 454.3 billion yuan in December.
Aggregate-financing forecasts from five analysts ranged from
1.35 trillion yuan to 2 trillion yuan.

Loans tend to rise sharply in January as banks start using
their new annual quotas and are normally eager to lend as soon
as possible to generate interest income, according to Shen
Jianguang, Hong Kong-based chief Asia economist at Mizuho
Securities Asia Ltd.